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Abu Dhabi launches $5bn bond issue

By Pramod Kumar
Abu Dhabi’s last debt market activity included a $2 billion bond in May 2021 followed by a further $3 billion in September Reuters/Dado Ruvic
Abu Dhabi’s last debt market activity included a $2 billion bond in May 2021 followed by a further $3 billion in September

Abu Dhabi has initiated $5 billion in a three-tranche bond after a hiatus of three years, according to a media report.

The $1.75 billion five-year bond, $1.5 billion 10-year tranche and $1.75 billion 30-year issue was priced at 35, 45 and 90 basis points, respectively, over US Treasuries, fixed income news service IFR reported.

Abu Dhabi Commercial Bank, Citi, First Abu Dhabi Bank, HSBC, JPMorgan Securities, Morgan Stanley and Standard Chartered are joint lead managers on the bond issue, the report said.

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Abu Dhabi’s last debt market activity included a $2 billion bond in May 2021, followed by a further $3 billion in September, Reuters said.

The emirate has a credit rating of “Aa2” from Moody’s and “AA” from S&P and Fitch Ratings.

A sovereign credit rating is an assessment of a country’s creditworthiness. It is applied to all bonds issued by a government. The ratings are important guides to institutional investors around the world who use them as benchmarks.

Many pension funds, for example, are limited by their statutes to investing only in investment grade credits. A re-rating can move markets.

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